USI’s Paula Scott, the insurance broker for the district, said Premera’s premium break was a “business decision.” “Premera is aware of what’s happening in the legislature,” said Scott, “and wanted to help.” The City of Sitka could expect to see similar savings.

An unexpected break from the city’s insurance carrier has left the Sitka School District with some extra cash — enough to preserve 4 teaching jobs, and 4 staff and admin jobs that were due to be cut.

The news came during the final public hearing and special meeting of the Sitka School Board this week (4-17-19) to adopt next year’s budget.

The news regarding the break in insurance premiums was staggering. Insurance is one of the Sitka School District’s largest expenses. The board was anticipating an increase next year of 12-percent — something over $700,000 — but instead got a reduction of 7-percent, plus a two month “premium holiday” in July and August, when neither the district or its employees will have to pay anything.

The net savings adds up to about $1.2 million. You can see the district’s initial recommendations for use of the savings here.

It was welcome relief for a board that was preparing to cut 16 positions, and now may only have to cut half as many. But others — particularly staff waiting on news of whether they or their colleagues would have jobs next year — were a little chapped. Susan Brant Ferguson teaches Music at Keet Gooshi Heen Elementary.

“I’m super relieved about the money from the insurance,” said Brant-Furguson. “And it makes me angry that we are at the mercy of these insurance companies, and that they can, at a whim, change our budget situation to that degree.”

But it wasn’t exactly a whim that prompted the reduction in premiums. Paula Scott, with USI, is the broker for the policies carried by both the city and the school district. In a phone call with KCAW, Scott said that it was a “business decision on Premera’s part.” She said that Premera is aware of the state’s fiscal issues, and the company wanted to help customers it has worked with since the 80s.

Jay Sweeney, the city’s chief administrative officer, concurred with that view, but offered additional perspective: “We were serious about hard-considering other options, and Premera was aware of that,” Sweeney told KCAW. He added that the city was looking at buying new policies through the employees’ unions.

The Sitka School Board took some time to consider how to reallocate the windfall — nearly four-and-a-half hours — but ultimately settled on a combination of shoring up its sagging savings account, and putting back a teacher each at Baranof and Keet Gooshi Heen Elementary schools to keep class sizes below 20 at all grade levels except 5th, where there should be 21 students per class next year.

The move wasn’t without controversy, however. Board member Elias Erickson proposed cutting half of a teaching position — likely an Art teacher — at Blatchley Middle School to balance the addition of a full-time position in first grade (and keep the draw on district savings to only $50,000 to cover the rest). Erickson’s amendment passed 4-0-1, with board president Jenn McNichol abstaining. McNichol was reluctant to tap into the board’s newly-restored savings account, saying that budgeting for the 2020-21 school year would likely make this year “look like a cakewalk.”

Board member Amy Morrison offered the amendment to restore the teacher at Keet Gooshi Heen, and balance it with a draw on savings. Eric Van Cise proposed modifying Morrison’s amendment by balancing it by cutting half a secretarial position at both Blatchley and Sitka High.

That brought Blatchley principal Ben White to the microphone to remind board members that education did end at middle school.

“In the last couple of years I’ve lost my Home Economics program,” White explained, adding “I’ve lost my Spanish program. I’ve lost the librarian. I’ve lost a full-time PE teacher. It now appears that I will lose a half-time Art teacher and a half-time secretary. While I appreciate the conundrum that the school board is in — and also I’m a former K-5 teacher, and that is important — the importance of education for kids doesn’t change or get less as they get older.”

Van Cise subsequently withdrew his proposal, and Morrison’s amendment passed unchanged 5-0, this time with board president McNichol joining those in favor.

One other amendment also ran into trouble: Member Erickson proposed eliminating a full-time position at the high school — likely a counselor — and splitting the savings between district reserves ($50,000) and Community Schools ($50,000), which the administration suggested could be completely self-funded.

Shop teacher Mike Vieira testified that spontaneously cutting a counseling position to fund an after-school recreation program would have repercussions in the future, and harm the district’s ability to recruit specialized staff.

Another teacher, Rebecca Himschoot, reminded the board about mission.

“I’m probably stating the obvious but Community Schools is outside of what our students need,” Himschoot testified. “So when we start messing with full-time positions for what we’re here to do — educate students, and that takes a lot more than just content education as you know — and we start looking more broadly than that, as much as I would like to do that, I’m very focused on the students and their needs, thanks.”

The board voted down the amendment, but — on the advice of district business manager Cassee Olin — agreed to take $25,000 out of savings to support the Community Schools contract. Olin said it would give the board some leverage over the winning bidder, should they fall out of compliance with the contract.

After all amendments, the final tally of staffing cuts were 4 teachers (mainly due to lower enrollment), 2.5 support staff positions, and a half-time admin position — roughly half the 16 cuts proposed on April 12 — before the district learned of the insurance savings. And as a bonus, the district is proposing to add back a full-time library paraprofessional at Blatchley Middle School. The final budget of $19.4 million ($21 million including pension liability) is about $300,000 less than last year.

The school budget now goes to the Sitka Assembly for approval — where it could hit a roadblock.

Jay Sweeney, who manages the finances of the City of Sitka, remained throughout the entire four-and-a-half hour meeting. Speaking with KCAW afterwards, he said “There is a multi-hundred thousand dollar difference between what was proposed by the assembly to fund schools, and what was adopted by the school board.”

District business manager Cassee Olin confirms the difference is $750,000. The assembly will take up the school district budget as the first item on its agenda, on its first regular meeting next month, May 14.

Note: The district’s budget also assumes the legislature will fund Alaska schools at the same level as last year, and honor the terms of HB 287 (which was passed and signed by former Alaska Gov. Bill Walker last year) which pay out $20 million authorized for schools statewide this year, and pay half of the $30 million authorized by the bill for next year.

If any of these revenue assumptions don’t materialize as expected — including the Sitka Assembly’s local contribution — the school board could pass a budget revision in mid-summer which could have further impact on staffing levels next year.